Petroleum prices cut further

Drastic fall in international crude prices has forced the Nepal Oil Corporation (NOC) to slash petrol, diesel and Aviation Turbine Fuel prices for the second time in a week. The new prices will be applicable from midnight.
“Petrol and diesel prices have been reduced by Rs 5 to Rs 90 and Rs 65 per litre, respectively. The ATF price for international flights has been cut by $100 to $1,300 per kilolitre. For domestic flights, ATF price has come down by Rs 5 to Rs 95 a litre,” NOC Managing Director Digamber Jha said.
However, the prices of cooking gas and kerosene — widely used for domestic consumption — will not change.
Though the NOC has warned petroleum dealers not to charge more than the prices fixed by NOC, Nepal Petroleum Dealers’ Association (NPDA) has come up with its own prices. “A consumer has to pay Rs 90.25 for per litre petrol and Rs 65.30 per litre diesel in the Valley,” according to Saroj Pandey, president of NPDA.
According to Jha, after this price adjustment the state oil monopoly will make Rs 350 million profit per month at the current rate, if the full demand of 75,500 kilolitres were met. “NOC will still earn Rs 3 per litre profit in kerosene and diesel,” Jha said, adding that NOC will gain Rs 17 per litre on petrol and Rs 25 a litre on ATF, making a profit of Rs 350 million per month.
“If this rate continues, wewill be able to pay our Rs 16 billion due loan within 40 months,” informed Jha.
NOC board also decided today to adjust petroleum products’ prices on every third day of the month from December. “NOC receives a new price list from the Indian Oil Corporation (IOC) - the sole supplier of petroleum products to NOC - on the first day of every month,” Surya Prasad Silwal, joint secretary of Ministry of Commerce and Supplies said.“If the international crude prices go up or down, the domestic prices will also beadjusted accordingly,” Jha informed without spelling the formula to adjust price. Today, crude price is hovering around $67 per barrel (159 litres) in the international market.
NOC board has also decided to provide cooking gas and kerosene at subsidised rates. “One cylinder of cooking gas and 10 litres of kerosene (in urban areas) and five litres of kerosene (in VDCs) will be provided at subsidised rates per family,” Silwal said, adding, “If a family needs more than one cylinder, they will have to pay the market price that will also be adjusted soon.”
According to the NOC, it is incurring a loss of Rs 361 per LPG cylinder. “We’ll send the decision to ministry and once it gives a green signal, it will immediately come into effect,” Silwal added.